Daijiworld Media Network - Mumbai
Mumbai, Jan 1: Market regulator Securities and Exchange Board of India (SEBI) has launched a sweeping crackdown on alleged stock price manipulation involving DU Digital Global, an SME-listed firm, barring 26 individuals from participating in the securities market for orchestrating an artificial surge in the company’s share price.
In a comprehensive 142-page order, SEBI concluded that the group engaged in coordinated and deceptive trading practices that drove the stock from about Rs 12 in August 2021 to an extraordinary high of Rs 296.05 by November 2022. The regulator noted that this nearly 2,500 per cent rise had no backing from the company’s financial performance or any material corporate developments.
SEBI has directed the accused individuals to disgorge unlawful gains exceeding Rs 98.78 lac and has imposed additional penalties amounting to Rs 1.85 crore. The trading restrictions imposed on the 26 entities will remain in effect for periods ranging from one year to two-and-a-half years.
According to the findings, the manipulation was carried out through synchronised and circular trading patterns designed to create misleading demand and inflated trading volumes. SEBI stated that such transactions have no genuine economic rationale and are intended solely to deceive investors and distort market prices.
The regulator also observed that some of the entities involved had previously faced regulatory action, pointing to a recurring pattern of market abuse. SEBI warned that such manipulation disproportionately harms retail investors, who are often drawn in by rapidly rising prices without access to complete information.
Emphasising the need to safeguard investor confidence, particularly in the SME segment where stocks are less liquid and more vulnerable to manipulation, SEBI said decisive enforcement action was essential to maintain market integrity.
DU Digital Global, formerly known as DU Digital Technologies, was listed on the NSE’s SME platform in August 2021. SEBI noted that the case serves as a cautionary example of the risks associated with speculative trading in smaller companies and underscored the importance of due diligence by investors.